17 posts from September 2006

September 28, 2006

In the latest issue of the Green Bag, David Garrow has a very interesting discussion of the ideological leanings of feeder judges and the impact they may have on the internal workings of the Supreme Court. (Feeder judges, for those unfamiliar with the term, are lower court judges whose clerks often go on to clerk for the Supreme Court.) Garrow notes that many feeder judges are considerably more ideological -- that is, less politically centrist -- than is typical for appellate judges. Garrow writes:

[I]n recent decades virtually every [feeder judge] has been either exceptionally liberal or highly conservative and almost none have been politically difficult to pigeonhole.

September 27, 2006

Have you ever heard of “credit derivatives”? Most of us haven’t, but we should become familiar with them because they are poised to transform how we think about corporations. The basic idea is that banks and other holders of corporate debt can now spread this risk to other willing bearers using a variety of intricate financial tools. In the most basic flavor, a bank that holds a loan to a company on its balance sheet agrees to pay a quarterly fee to a third party (usually an insurance company, other bank, or hedge fund) in return for a make-whole payment by the third party in the event that the borrower on the underlying loan defaults. Called a “credit default swap”, this is nothing more than insurance against the reduction in value of the loan. The CDS market is currently over $26 trillion. That is right, TRILLION. Even more profound, however, is the rethinking we will have to do about our models of corporate governance and finance in a world in which debt starts to look more and more like equity (i.e., freely traded and held in diversified portfolios by dispersed individuals and entities). One potential issue with these transactions is the potential moral hazard it creates for borrowers.

September 25, 2006

The recent riots in Hungary apparently occurred because the prime minister admitted that he (as well as other members of the governing elite) lied to the public about the health of the economy. It is an odd feature of public life that everyone seems to think that politicians lie and yet are surprised when their lies are exposed (e.g., Clinton). Extreme suspicion about the president’s truthfulness can undermine his ability to act, and even the super-powerful American presidency can be undermined by public distrust as virtually every recent president has experienced (Johnson, Nixon, Reagan and Iran-Contra, Bush I and “no new taxes,” Clinton, Bush II and WMD). Is there any way for the president to enhance his credibility so that the public will support his policies and enable him to get things done? In this paper, Adrian Vermeule and I discuss some mechanisms. The abstract is below.

September 22, 2006

I don’t agree that the public “has already surrendered much of its communicative privacy by its profligate use” of modern means of technology that “create essentially indelible records” of our communications, purchases, etc. Certainly, it’s true that most people have embraced cells phones, email, and the internet without paying much, if any, attention to the extraordinary invasions of privacy they make possible. But this will change once people come to understand how vulnerable they are. It’s a bit like electronic bugging and wiretapping in the first half of the twentieth century. It took fifty years for courts and legislatures to begin regulating such conduct, but once people realized the danger, government electronic surveillance was declared unconstitutional and private electronic surveillance was declared unlawful. The same will happen with respect to the modern means of communication. Once people recognize the danger, they will insist on regulation. So, I wouldn’t leap to the conclusion that the public has “surrendered” its privacy. We are merely in transition.

September 21, 2006

Over the past year, Judge Posner and I have had many opportunities, both public and private, to debate the nation's response to the war on terrorism. In simple terms, I consider myself a "civil libertarian," whereas he describes yourself as a "pragmatist." Not surprisingly, we disagree on many issues. I usually argue that restrictions of civil liberties should be a last resort, considered only after we are satisfied that the government has taken all other reasonable steps to keep us safe. He usually argues that restrictions of civil liberties are warranted whenever the benefit to be derived from those restrictions in terms of increased security "outweigh" the cost to society of limiting the rights. Despite our disagreements, we have increasingly found common ground. I think it will be useful to explore our similarities, rather than our differences, to see if we can agree on some recommendations.

(after the jump, see the rest of Stone's argument, followed by Posner's)

Another entry in our continuing series of "Head to Head" debates. Over on the American Constitution Society Blog, Judge Richard Posner and Professor Geoffrey Stone are having a debate

in recognition of the publication of Judge Richard Posner's latest book, Not A Suicide Pact: The Constitution in a Time of National Emergency. This debate continues their long-running discussion about civil liberties in wartime. We'll be posting the content here, although you are more than welcome to check it out at the ACSBlog as well.

September 19, 2006

(This is my third post on Henry Jenkins’s new book Convergence Culture; the first two posts are here and here; and the Wall Street Journal had a terrific article on fan fiction on Saturday (here ($)).)

Jenkins pushes (p.190) for a reformulation of fair use “to legitimate grassroots, not-for-profit circulation of critical essays, and stories that comment on the content of mass media.” But he clearly wants more, as he recognizes that most fans aren’t that interested in producing work that the law is most likely to protect (parody or critical commentary of the sort seen in The Wind Done Gone), but who want instead to write about Ron and Hermione kissing. That said, Jenkins believes that copyright holders should be protected from commercial competitors.

I am most interested in Jenkins’s claim about the relationship between IP and authoritative status.

September 17, 2006

A good deal has been made in recent days of the objections raised by Senators Lindsey Graham, John McCain, Olympia Snowe, and John Warner to President Bush's proposed legislation authorizing the use of military tribunals to try enemy combatants. I applaud the actions of Graham, McCain, Snowe, and Warner. What I find astonishing -- and deeply distressing -- is that other Senate Republicans have not rallied to their support.

Senators Graham, McCain, Snowe, and Warner have objected to several provisions of the Bush proposal, including those expressly authorizing the prosecution to use hearsay evidence, secret evidence, and evidence obtained by coercion involving degrading and inhuman treatment. Each of these proposals represents a profound and radical departure from the fundamental standards of fairness and decency that have long governed both criminal courts and military tribunals throughout the history of the United States. Each of them is legally, constitutionally, and morally unwarranted.

September 15, 2006

Enter the world of fan fiction. Fans create new content using the characters and settings of the original. This is really the heart, as Larry Lessig puts it, of the extent to which popular culture on the Internet is going to be read-only vs. read-and-write. Fan fiction predates the Internet—Textual Poachers is a 1992 work—but the Internet makes available to the world what had been private writings circulated in small groups. Jenkins focuses on Harry Potter and Star Wars.

September 14, 2006

In a rare instance of real world experience confirming an academic hypothesis, Google has announced that it is setting up a for-profit charity. In this paper, which I discussed a few days ago (below), my coauthor and I argue that the for-profit charity might be a sensible, underexploited institution. In the course of the discussion, we ask why, if we are correct, there are no for-profit charities and we provide the obvious answer that the reason is tax discrimination. But Google’s plan suggest that the advantages of the for-profit form are strong enough to outweigh the tax disadvantages. The next step is for the government to recognize that tax discrimination on the basis of corporate form is unwise and to change the law.